7th Oct 2010. Click here to download this 200 page report: 2010 NSW Economy in 2020 Access Economics Apr 2010
The NSW economy is experiencing almost two decades of uninterrupted economic growth, despite the immediate turbulence of the global financial crisis. This growth has driven up incomes and living standards and has helped underpin the development of a modern, globally integrated and dynamic economy.
The NSW economy currently enjoys a number of strengths. It is highly service and knowledge focused, with services accounting for around three-quarters of economic output. Exports of professional and education services have risen, particularly as strengthening Asian economies have provided opportunities for NSW to develop as a regional hub for high-value services. The large NSW population (and the largest state economy) also provides a base for the ongoing development of information technology, finance and professional services.
The closer integration with emerging Asian markets has also provided significant advantages for the State’s resources sector. Exports of coal in particular have increased markedly over the past decade and are set to rise further over the next few years.
Sydney’s position as a global city also provides significant benefits in terms of international reputation, business and financial networks and in fostering a vibrant and innovative culture. This plays a large part in motivating many domestic and global companies to locate head offices in Sydney.
Looking beyond the current economic climate, the medium term prospects for NSW look favourable. However, in entering the second decade of this century, the NSW economy will be shaped by new and different forces and encounter fresh challenges and opportunities. These factors have been the focus of this study, which considers the major changes that are likely to occur in the NSW economy to 2020. Among a myriad of influences on the NSW economy, four particular mega-trends are expected to have a considerable impact on the shape and performance of the economy:
■ national and global policy actions to address climate change;
■ demand and competition from emerging economies, especially China and India;
■ the widespread adoption of new information technologies; and
■ demographic change, especially a growing and ageing population.
Each of these forces, both individually and acting in conjunction, present considerable opportunities for the NSW economy. They are expected, on balance, to add to overall growth with virtually all sectors of the economy able to benefit at least to some extent. At the same time, however, significant adjustments within the economy will be required if the challenges are to be best met and the opportunities realised. Skills will have to be developed, regulation and planning decisions will have to be responsive to changing demands, strategic investments in infrastructure will be needed and government and business will have to coordinate to foster areas of greatest potential.